IRS Issues Rules Regarding Same Sex Marriages

Family Law Attorneys Assisting Same-Sex Couples in Washington with IRS Regulations

On September 2, 2016, the Internal Revenue Service issued its final regulations defining marriage for federal tax purposes. The regulation changes are in response to two earlier U.S. Supreme Court decisions:

  • United States v. Windsor, which, in 2013, struck down the existing definition of marriage as only between a man and a woman, and
  • In Obergefell v. Hodges, the Court’s 2015 decision essentially made same-sex marriages legal throughout the nation.

Rules Require Valid Marriage

Tax issues were particularly at the heart of Windsor. Windsor claimed the federal estate tax exemption allowed for “surviving spouses” following the death of her spouse, another woman. The IRS denied her entitlement and refused to give her a $400,000 refund. The Supreme Court said that for federal tax purposes, the Service’s view of marriage was too narrow. After the Windsor decision, the IRS issued Revenue Ruling 2013-17, which states that married same-sex couples are now treated as married for all federal tax purposes where marriage is a factor if the couple is lawfully married under the laws of one of the 50 states, the District of Columbia, or a U.S. territory. In light of these final IRS regulations, Rev. Ruling 2013-17 is no longer determinative, at least as far as the definition of marriage goes.

IRS Regulations Clarify Terms Such as “Spouse”

Under the final rule, terms such as “spouse,” “husband,” and “wife” apply to same-sex marriages for federal tax purposes, if the marriage is recognized in the state where the couple was married, regardless of where the couple lives.

“Marriage” Does Not Automatically Include Persons in Domestic Partnerships or Civil Unions

Under the new IRS regulations, the term “marriage” does not include registered domestic partnerships, civil unions, or other similar relationships recognized under state law, if those relationships are not denominated as a marriage under that state’s law. Accordingly, wherever terms such as “spouse,” “husband and wife,” “husband,” and “wife” are found within the Internal Revenue Code, those terms do not include individuals who have entered into a civil union or registered domestic partnership.

Final Regulations Break No Significant New Ground

Legal experts agree that the final regulations do not break new ground. They do clarify some matters, particularly with regard to the treatment of registered domestic partnerships that were formed in states that do not equate to such relationships as marriage. That distinction can be quite important. While a member of a registered domestic partnership would not be able to take advantage of federally allowed marital deductions for estate tax purposes, they would not be burdened by what is sometimes referred to as the “marriage penalty,” which can occur either when high-income individuals marry and file a joint return or, alternatively, where prior to marriage one has a significantly greater income than the other.

The breakup of any Marriage is Traumatic

With the new IRS rules, federal law has now caught up with what is already in place in Washington state. Same-sex spouses who have formalized their relationship via a valid marriage are “in the same boat” as spouses in heterosexual marriage. While many same-sex marriages will successfully continue for years to come, some matrimonial experts warn that the extra pressures on same-sex spouses may trigger rising divorce rates in this “new” marriage category. Marriage dissolution is traumatic; it’s fraught with difficult decisions and it has huge financial implications. Particularly where each spouse brought the property into the union, the division of marital property can be contentious.

Bolan Law Group. has more than 30 years of combined experience providing individuals with family law services throughout the Pacific Northwest. We have helped clients work through difficult circumstances and stand ready to help others who require the services of skilled, experienced family law attorneys. We pride ourselves on designing the simplest, most effective solution for your legal issue. For assistance with any family law issue, contact us on the web, or call our office at (253) 470-2356.

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